What is a short sale?

Asked by Brad, Annapolis, MD Mon May 12, 2008

I was wondering if anybody could elaborate on what a short sale is? How does it work? And my number one question is how can one speed up the process in under 30 days so I can lock in a mortgage rate? Argh.

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Dante’s answer
Dante, , 48170
Mon May 12, 2008
A "SHORT SALE" has nothing to do with speeding up the selling process. Short sales actually may take longer because the sale is subject to 3rd party (bank) approval. The term comes from the sales price being "Short" or deficient to satisfy the payoff of the mortgage loan. Usually, before the bank negotiates a short sale , the seller has to prove hardship to the bank. In most cases loss mitigation (a dept of the bank) won't even start the process until there's an offer to purchase on the table.
3 votes
Mary, Both Buyer And Seller,
Mon May 12, 2008
Hi Brad,
You're on the right website for learning about short sales from the trenches..
here is one thread
here's a link to article with Wall Street Journal article that is very informative
titled "Why lenders are leery of Short Sales"
2 votes
James Downing, Agent, Dunedin, FL
Mon May 12, 2008
A short sale is when a home owner owes more than they can sell the property for. The bank(s) must approve the sale before the property can be purchased.
As far as speeding up the process; you have to make sure that the seller and their agent already have pre-approval from the bank for the short sale. However thinking you could ever close a short sale in 30 days in unrealistic. The quickest I have ever heard a short sale close is about 7 weeks.
Trying to buy a short sale with a 30-day lock is simply too risky for the buyer.
3 votes
Tina & Mike…, Agent, Owings, MD
Mon May 12, 2008
Hello Brad, I would prepare for a longer settlement time. We have had some take 3-4 months to settle. I don't believe you could spedd it up under thirty days. The earlier deffinition was correct.
1 vote
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